New York Counties Begin Reaping Financial Tax Rewards of Upstate Casinos
Posted on: September 15, 2017, 04:00h.
Last updated on: September 15, 2017, 05:50h.
New York counties have more tax money in their coffers than in years past thanks to the liberalization of gambling in the northern part of the state.
As local governments begin planning their 2018 fiscal budgets, they’re pleasantly afforded new income to fund everything from education to senior citizen programs.
In Tompkins County, for example, home to Ithaca, government officials have $1.36 million in revenue that came from Upstate New York casinos. The money is the result of two recently opened casinos in the area, Tioga Downs and del Lago.
In November of 2013, voters in New York approved a ballot question to authorize three non-tribal casinos in the Southern Tier. Tioga Downs opened in December, while del Lago and Rivers Casino opened earlier this year.
Combined, the casinos are expected to generate $7.3 million in new school aid and property tax relief, along with $12.8 million in local government aid, in the first year alone.
Local government accounts are flush this year, as casinos ponied up their costly license fees. Tioga Downs paid $20 million to bring slot machines and table games to its racetrack, while the two standalone casino resorts, del Lago and Rivers, each paid $50 million.
Slot machine revenues are taxed at up to 37 percent, while table games share 10 percent with the government.
While all is good and well in the mind of local and state government officials, Jeff Gural, owner of Tioga Downs, says earlier projections predicting the market’s size are way off. Last month, the real estate developer, who also owns the Meadowlands Racetrack just outside New York City, said the market is too saturated in Upstate New York.
Alan Woinski, president of Gaming USA Corp, a gaming industry consulting firm, told the New York Daily News, “There is just not enough business there. You just can’t have casinos, racetrack casinos and tribal casinos that close to each other.”
Gural predicted first-year tax revenue to come in around $32 million. But through the end of June, Tioga Downs has sent checks totaling just $13.3 million.
Rivers estimated first-year tax revenue to come in between $69 and $86 million, and del Lago thought somewhere in the range of $59 million and $75 million was realistic. But both of those casinos are also coming in short, with their bottom lines now anticipated to be 35 percent lower.
Bad Business Strategy?
Governor Andrew Cuomo (D) says it’s far too early to assess the long-term economic impact the upstate casinos will have on New York counties. But a recent report from S&P Global Ratings, a financial information firm that manages the S&P 500 Index, says governments that rely on casinos for tax revenue are gambling with poor odds.
The financial agency said states are at risk of seeing their credit ratings slashed, as casino revenues can wildly fluctuate.
“While there could be short-term economic and budgetary gains, they are unlikely to improve state credit quality,” the S&P brief stated. “The likelihood that these revenues will meaningfully supplement state revenues over the long-term diminishes and will have long-term credit implications.”
Related News Articles
Related News Articles
June 8, 2022 — 2 Comments—